10 Ways to Increase Your Earning Power

When it comes to personal finance, it all starts with making money. To that end, we naturally want to make sure that we’re making the most of our earning potential.

Now, I know that there are other important aspects of managing your money. Saving is critical, and so many personal finance enthusiasts have a natural inclination to focus on frugal choices and living within one’s means. Believe me, if you’ve read my posts in the Squirreling Gone Wild series, you can see that I can relate 🙂

Beyond that, we need to invest our savings. I’ve written before about how the rate of return is important to focus on, and how it can make a huge difference. Thus, investing is a vital part of our personal finance strategy.

There are other aspects we should consider as well, such as risks. But when you put it all together, before we can save and invest our money, we need to make money first.

I look at our earning power as something like the fuel that drives the wealth engine. Without incoming cash flow, we simply can’t get to where we want to go. If we’ve already reached a comfortable destination later in life, and the car stops, at least we’ve reach where we need to go. But we’ll be hard-pressed to get there without that engine working properly. So, we need income!

Exploring this further, I’ve come up with 10 things that we can do to enhance our earning power. There are probably countless other things to add to this list (please feel free to leave them in the comments below), and this might be a somewhat unconventional way to look it. But this is, I think, is a well-rounded starting point:

Understand the market

Okay, this might not be the first thing that one might think of. But the reality is that goods and services generally yield what the market will pay. So, if we are in a line of work that doesn’t pay well, we won’t make as much as we could if doing something that paid more. The concept of supply and demand for income is one to think about, recognize, and take advantage of!

Think career, not job

We should of course be thankful if we have a job, given that plenty of bright, well-intended people are out of work at any given point in time. That being said, I’ve noticed over the years that people that truly think of themselves as having a career rather than a job or series of jobs tend to advance more quickly in their field. To go back to the analogy of the engine, if income is the engine driving our finances, one’s career is the engine driving income

Value a formal education

I know that college is getting more expensive, and jobs are absolutely not guaranteed to anyone just because of a degree. While some spin this as meaning that college doesn’t pay anymore, I think it’s the opposite. To me, an undergraduate degree is more important than ever. In many fields, a graduate degree is essential as well. Valuing education while being cognizant of the cost/benefit proposition of different schools and degrees is the way to go.

Always keep on learning

Yes, the aforementioned formal education is a starting point and entry ticket to get started. Beyond that, we need to realize that we’ve only gotten started, and that learning doesn’t really stop. I’m not sure if this matches your experience, but to me it seems like the rate of change in technology and business in increasing. Thus, we have no choice but to keep learning about different business models, technology, software, and the like.

Stay persistent

I can’t really give any stats on this, but can go by my own observations and empirical evidence accumulated over time. In that regard, it seems to me that a trait of those who can really succeed is the ability to be persistent. This means keeping focused on a goal and being able to keep on going despite obstacles and frustration.

Be adaptable

Given that things seem to be changing at a faster rate it would seem to be a good idea to be adaptable. I’ve seen reorganizations in the workplace, layoffs, and many other examples of how things can often be fluid. Since change is a constant, we might as well try to be good at embracing it! Admittedly, this is something that is a work in progress for me, and I know there are people better at this, but working on it I sure am.

Network

As far as networking is concerned, what I mean is that it can be very helpful to regularly do so. Again, this wasn’t something that came naturally to me but I’ve learned to embrace it by trying to think of ways to give and help without expecting anything back. Ultimately, it indirectly helps (though not the explicit intention), as opportunities are often presented to those we know or to whom someone we know can recommend. There is much to respect about having a strong professional network.

Maintain an entrepreneurial mindset

People have jobs in many cases because their work is needed in order to make money for the organization or to save it money. Keeping that in mind, if we demonstrate that we can improve the bottom line, it can make us more essential and valued. Plus, for those who take it to the next step, they could have a side hustle to diversify and even supercharge income.

Don’t rest on your laurels

I’m sure we’ve all seen this concept in play. What comes to mind for me are companies or communities that might have had great success in the past but then got a little bit too comfortable. It seems like to progress we probably want to keep our “edge” and always think forward.

Stay healthy

Do you think that this should have been at the top of the list? I can see how this might be the most important thing we can do. If we can’t stay healthy and have to deal with medical issues, we might not be able to stay in the game. Not only is keeping away from major ailments critical, but it’s also important to make the right decisions each day. I don’t know about you, but I tend to work so much better and more productively when I take care of myself. This means getting a good night of sleep each night, and I’m convinced that there is some correlation between sleep and wealth. Also, at least for me, eating the right food helps productivity.

Comments

I think one of the keys is networking. I think so many people get catch up in e-mails, texts, etc impersonal forms of communication these days that when seeking a new job opportunity the under value picking up the phone. I’m trying to impress this upon my son and daughter who are looking for their first jobs this summer. Making a good impression no matter what you are doing, also could lead to future opportunists for you.

All of these are very important and I think stay healthy should be moved up to the top! Even if you have a great career and make more than a decent salary, if your work-span gets cut short, your earning power shrinks.

I think you’re right about this needing to be at the top of the list. Even beyond the broader importance of having good health, it really does play a role in wealth creation too. Good health enables to be in a position to earn.

I think one of the keys you might add would be to ‘Stay Positive’. Many people, just like with any type of ‘improve such-and-such situation’ set out with big goals, and start moving toward them with full gusto. Then, when roadblocks appear or the initial charge wears off, they start to get discouraged or disinterested. The same thing can happen with a career/work situation if you’re not careful, and you might find yourself getting jaded, spiteful, or complacent, all of which will derail all of your hard work. You don’t have to be a cheerleader every moment of the day (that can get annoying, too) but if you find yourself on the wrong side of the attitude fence, you need to figure out a way to climb back over, and quick.

Great points here. That reminds me of new year’s goals, where many can do really well for a while but then get derailed and back into the old way of doing things. Keeping up the right attitude and staying on the positive side of things when inevitable roadblocks and challenges occur can make all the difference. This might be a variation/corollary to the persistency tip, the more I think about it.

Everything on the list is great, but what I like the most to improve your earning power is to keep on learning. Everything in the world nowadays is changing and improving so fast, and to cope up with all these changes is really important.

The more you know and the more updated you are will be of great help to not just improve, but also to maximize your earning power.

My favourite in this post was definitely, think career not job. I’ll be starting off my post grad career in September and I’ve often found myself thinking of it as a job and then sometimes the start of my career (which will provide me with a new skill set). It’s definitely what I will continue to focus on and not just believe I’m going to a job but working on building my career.

It’s good that you’re thinking about this distinction when starting out a post-grad career, it would seem to be a great time to shape those perspectives. Seems like you’re ahead of many others by thinking these things through.

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Disclaimer

We are well meaning folks that are not investment professionals or financial advisors. Please feel free to have fun here, and take this information in the spirit of entertainment, as it is not financial or legal advice, For that, seek an appropriate professional. Your actual financial decisions are your own responsibility. Thank you.